Another Appellate Court Finds President’s Recess Appointments to NLRB to be Invalid

Yesterday, the U.S. Court of the Appeals for the Third Circuit held that the NLRB lacked jurisdiction to take action where it lacked three Board Members who had been properly appointed. In NLRB v. New Vista Rehabilitation and Nursing, amajority of the panel held that President Obama’s appointment of Craig Becker to the Board during an “intra-session recess” (i.e., a break during a session of the Senate) violated the Constitution and thus, the Board lacked the necessary three-member panel to act. The Court construed the Recess Appointments Clause to the Constitution as permitting appointments by the President unilaterally only during recesses “between sessions” of the Senate (i.e., the formal break when a Session ends before another begins).

Lawyers – particularly wonky Constitutional scholars – will in the coming months extensively analyze the majority and dissenting judge’s scholarly decisions. But, I will give you the “bottom line” on this. The majority’s holding is of great significance for three main reasons.

· First, the majority concluded that the long presumed power of the President to make recess appointments during an intra-session break of 10 or more days was not supported by the Constitution. Thus, only appointments made when the Senate recesses between sessions are valid “recess appointments.” This is consistent with the decision by the D.C. Circuit in Noel Canning (which was discussed in our January 2103 Eupdate).As such, actions taken by this or any prior President that were taken by an improperly constituted agency could conceivably be challenged, although NLRB cases involve litigated matters rather than rulemaking so the time limits for challenges will limit the impact to current labor cases. Notably, President Obama had made 26 recess appointments as of January 2013; George W. Bush made 141 in his eight years in office.

· Second, in finding that the recess appointment of Craig Becker in March of 2010 to be invalid, the panel majority’s decision opens the door to challenges to far more decisions than did that of the D.C. Circuit. Noel Canning concerned only the appointments made by President Obama in January of 2011 during the weeks between Christmas and New Year’s when certain members of the Senate continued to hold pro forma sessions in order to avoid a recess.

· Third, the conclusion that the improper appointments deprived the Board of jurisdiction to act means that any employer or union at any stage of a case – whether before the NLRB or on appeal — can now raise the defect as a reason to vacate Board action. Jurisdiction can be challenged at any stage without being raised earlier as it goes to the fundamental power of a tribunal to act. The D.C. Circuit did not analyze the issue as jurisdictional (the panel majority of the Third Circuit noted that its sister circuit had “conflated” the analysis; that is, missed this step.)

Finally, I will share a couple of observations that are less “practical” (I do get to be a little “wonky” now and then). The majority’s decision focused on the principle that separation of powers was of paramount importance to the framers of the Constitution. The NLRB’s extreme position – that the President had the power to make appointments without the advice and consent of the Senate during any break during a Senate session regardless of duration – would permit the exception (recess appointments without Senate approval) to swallow the rule (the President must obtain Senate approval for appointments). The intermediate position – that breaks of a not-insignificant duration constitute “recesses” – was not in the text of the Constitution or supported by surrounding evidence from the time of its drafting.

In addition, the Court –quite properly in my view – rejected the position taken by the Board and its supporting “friends of the court” briefs that the issue was “nonjusticiable,” meaning that only the President could decide what the power entailed and that the judiciary’s respect for the Executive Branch required it to stay out of the matter. The notion that one branch of government (here the Executive) should have unreviewable discretion to decide the scope of its power simply is not tenable. As the majority stated, “Defining ‘recess’ in the Recess Appointments Clause does not express a lack of respect for coordinate branches of government because defining the word is merely an exercise of our judicial authority ―to say what the law is, which sometimes requires an evaluation of whether one branch is aggrandizing its power at another’s expense.”

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The Labor & Employment Report is your one-stop blog to learn about the latest developments in labor and employment law issues. Published by Shawe & Rosenthal LLP, Management’s Workplace Lawyers, this blog seeks to inform human resource professionals, corporate counsel, business leaders, policy makers, journalists, judges, and other attorneys about critical labor and employment issues. The Labor & Employment Report will closely track the National Labor Relations Board, federal and state court employment/labor decisions, and actions from relevant government agencies.

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